TODCO (the "Company") today announced the signing of a three-year drilling contract for its drilling rig, THE 208. The rig, a 200-foot mat-supported cantilevered jack up rig, was constructed in 1980 and has been cold-stacked in Trinidad since March, 2002.
The rig is currently being transported to a shipyard in Southeast Asia where it will undergo an extensive shipyard reactivation and upgrade that will include conversion from a mechanically driven rig to a conventionally powered SCR rig. Since we are in the process of finalizing bids from several shipyards the final reactivation and upgrade costs as well as the exact timing for reactivation of THE 208 remain uncertain. However, it is anticipated that the rig will begin drilling operations through a local contractor by the end of 2007 for Murphy Sarawak Oil Co., Ltd. ("Murphy Oil") to develop the Sarawak area offshore East Malaysia. Total revenues from the three-year term of the contract are anticipated to be approximately $130 million.
Jan Rask, President and Chief Executive Officer, said "We are very pleased with the signing of this contract for THE 208 and the work it will be doing for Murphy Oil. This contract is the result of our recent emphasis to market our mat-supported equipment in selected international markets and we look forward to working with our local contractor and Murphy Oil in Malaysia."
Statements regarding the reactivation of our THE 208 rig, anticipated revenues, as well as any other statements that are not historical facts in this release are forward-looking statements within the meaning of U.S. securities laws and involve certain risks, uncertainties and assumptions. These include, but are not limited to, general market conditions, estimated reactivation and mobilization costs, estimated reactivation and mobilization times, contract performance, governmental actions and other factors detailed in TODCO's filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
TODCO is a leading provider of contract oil and gas drilling services with the largest rig fleet in the shallow water of the U.S. Gulf of Mexico and along the U.S. Gulf Coast. TODCO's common stock is traded on the New York Stock Exchange under the symbol "THE".
Source: TODCO
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